Congressional leaders spoke with Obama on Wednesday night as the president prepared to return to Washington from his Christmas vacation in Hawaii.

“I told the president I would be happy to look at whatever he proposes,” McConnell said in a brief statement on the Senate floor. “The action is on the Senate side, and we will see if we can move forward on a bipartisan basis.”

“We’ll see what the president has to propose — members on both sides of the aisle will review it — and then we’ll decide how to proceed,” McConnell said. “Hopefully, there is still time for an agreement of some kind that saves taxpayers from a wholly preventable economic crisis.”

However, he also said that Republicans would not “write a blank check” just because the deadline for the fiscal cliff is little more than four days away.

Whether the Senate can pass a fiscal cliff-related measure before the end of the year depends “a lot” on the White House meeting, said Sen. Dick Durbin, a Democrat from Illinois, according to Bloomberg News.

Senate Majority Leader Reid responded that he was ready to introduce legislation to avert the fiscal cliff but wanted assurances that Republicans in the House and Senate would remove roadblocks that had killed earlier legislation to avoid the fiscal cliff.

“I would be most happy to move forward on something that Sen. McConnell said they wouldn’t filibuster over here ... and Boehner would support, if it was reasonable,” Reid said. “But, right now, we haven’t heard anything.”

Earlier in the afternoon, House Republican leaders said they would return to Washington for an unusual evening session Sunday. That would give lawmakers a chance to review any plan the Senate may be able to pass to avert the billions of dollars in tax hikes and spending cuts due to kick in beginning Jan. 1.

House Majority Leader Eric Cantor’s office announced plans for the Sunday session after a day of recriminations over the looming fiscal cliff.

Reuters

U.S. President Barack Obama speaks about the fiscal cliff at the White House last week.

House Republican leaders’ decision to call the chamber back into session was the only sign of progress on a day otherwise marked by political finger-pointing, along with consequent losses for U.S. equity markets. See Market Snapshot.

Reid began the day saying it “looks like” the U.S. is heading over the cliff.

Reid urged the House to pass a Senate bill extending Bush-era tax cuts for those earning $250,000 a year or less. The Nevada Democrat said the House is being operated under “a dictatorship of the speaker.”

A spokesman for Boehner said in response: “Sen. Reid should talk less and legislate more.”

Reid urged Republican leaders to offer ideas about averting the fiscal cliff, saying: “I would hope that [Boehner] and [McConnell] would come to us and say, ‘Here’s what we think will work.’ ”

The budget uncertainty helped propel losses on Wall Street, but indexes regained some ground on news that the House would be called back into session. The Dow Jones Industrial Average
DJIA, -1.24%
fell below 13,000 in midday trades for the first time in three weeks.

On Wednesday, Boehner had said the Senate must act first if the automatic spending cuts and tax increases, known as the fiscal cliff, are to be averted.

Adding to the charged atmosphere, Treasury Secretary Timothy Geithner announced Wednesday that he will start taking extraordinary actions so the U.S. government does not hit its $16.4 trillion borrowing limit on Dec. 31. In normal times, these steps would be in place until the end of February, but Geithner said the expiring tax breaks and spending cuts make any estimates uncertain. Read more about the debt ceiling.

In the absence of a fiscal-cliff deal, Bush-era tax cuts expire and a payroll-tax holiday enacted under Obama also expires, while some $1.2 trillion in spending cuts begin to come into force at a rate of about $110 billion annually over 10 years. The cuts are divided between Pentagon spending and other federal spending.

Federal unemployment benefits would also expire for 2 million Americans.

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